| Deflation occurrence rule
Suppose 10% of the whole economic transaction became bad debts. Bad debts are credits that can’t be collected. Then, 10% of the whole currency are the currency that doesn’t be distributed.
In this case, suppose there is a ¥100 coin, ¥10 in the coin can be thought
to be bad debts.
It was explained previously that currency is fractal structure. That means
whole currency is included in a ¥100 coin. 10% of the whole currency became
bad debt means that 10% of ¥100, in short, ¥10 became bad debt.
Therefore, only value of ¥90 exists in this ¥100 coin. It looks as if ¥100 exists, to tell the truth, it is true to understand that only value of ¥90 exists.
It realizes as time passes. Bad debt is currency that can’t flow, currency
without economic transaction. Currency occurs with economic transaction
in nature. Currency of amount of bad debt can’t flow means that scale of
economic transaction diminishes.
If bad debt of 10% exists, economic transaction decreases at the same
rate. As a result, amount of currency decreases 10%.
In this way, bad debt diminishes scale of economy. The diminish of scale of economy means occurrence of deflation. As described, bad debt occurs deflation.
As this kind of thinking doesn’t exist in classical economic theory.,
it is named
[Deflation occurrence rule] by bad debt.
As bad debt occurs deflation, it is necessary to dispose of bad debt as
soon as possible.
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